3 ms·

Look at their profits. This is a symptom of greed more than inflation. Recent research illustrates these inflationary-profit trends, in particular busting the

by dfxm12 4y ago

Look at their profits. This is a symptom of greed more than inflation. Recent research illustrates these inflationary-profit trends, in particular busting the myth of a wage-price spiral driven by increased worker incomes. Over 53% of price increases in the last two years have been driven by profit margin gains https://www.forbes.com/sites/errolschweizer/2022/05/10/how-windfall-profits-have-supercharged-food-inflation/?sh=965e31b66722 https://www.forbes.com/sites/errolschweizer/2022/05/10/how-w...

mensetmanusman 4y ago
May be greed, or may be because of regulatory capture. I.e. it is incredibly expensive to start a company due to all the requirements that the companies that do exist can continue to raise prices with no competition.
lamontcg 4y ago
> Look at their profits. This is a symptom of greed more than inflation. Inflation is just a rise in prices. Literally just defined as a rise in prices. It doesn't matter if the prices accurately reflect rising costs of doing business or wind up in profits. Inflation is more about the ability of consumers to continue to pay higher prices and the inelastic demand for whatever the good is. The market is fundamentally an auction and prices get bid up until elastic demand starts to appear.
TexanFeller 4y ago
Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example: 1) Near zero interest rates during the pandemic - technically set by the Fed, but under obvious political pressure to do it from both the former and current administrations. 2) Helicopter money from the government. I’m not just talking about the one time checks that people use as a strawman to attack as an inflation cause. There were student loan pauses, 300/mo per child credit(they tried to make it permanant!), and more. The fact that much of the money actually went to younger or poorer folks, which we celebrate, probably also drove inflation much more than money going to rich people, because the poor and the young are the most likely to immediately spend it. Lots of pandemic loans given to businesses too with little to no oversight too. 3) Supply side constraints due to shutdowns at suppliers overseas. 4) Demand side rebound demand for things people avoided or weren’t allowed during the pandemic. Much of this is likely attributable to government policy, so I blame our political class.
- com2kid 4y ago
  > Ask yourself why all of these companies were not greedy in previous years, In the case of Safeway/Albertsons, they jacked food prices up to make their finances look better for a merger. Flip side of this would be a subscription company dropping prices (or offering lots of promos) to gain lots of subs before a merger.
  - chrisco255 4y ago
    No company operates in a vacuum. Particularly, companies in commodity based industries, like grocery chains, which average maybe 3-5% gross margins, cannot arbitrarily increase prices without consequences (drop in demand). People will shift their purchasing power elsewhere. Unless, of course, every where else is also increasing prices because of the sheer amount of excess monetary liquidity sloshing around in the economy.
    - com2kid 4y ago
      > People will shift their purchasing power elsewhere. You are neglecting that people may not have a choice. For people w/o cars, they are limited to whatever grocery stores are within walking distance, or accessible by mass transit. In my case, my easiest choices are the extremely overpriced organic store, Safeway, or QFC. Once Safeway and QFC merge, I'll be down to basically two local choices, and I live in a major metro. I know people who have one grocery store around them. There are parts of the country[1] where in a ~15+ mile radius you have a single choice for shopping. Now throw in people who don't have the time, or ability, to commute, and many grocery stores can charge whatever the heck they want up to the limit of what consumers can afford. https://mobile.twitter.com/moetkacik/status/1580938712740831232 https://mobile.twitter.com/moetkacik/status/1580938712740831... From that thread, yes indeed, the price increase is 76% for 2019 to 2022, but that is (obviously) a completely absurd level of price increases for a 3 year timespan. And this isn't some unique situation, this is pricing at one of America's largest grocery retailers, a grocery store chain that is the sole grocery store in many communities, and a grocery store chain that is set to soon become much larger. [1] This isn't unusual, in Washington State if you go outside any major city, you find that smaller cities/towns basically have one Safeway for the surrounding area and that is it. Visiting friends on the east coast, I noticed a similar situation, a cluster of small towns and a single grocery store (Kroger owned).

by dfxm12 4y ago

mensetmanusman 4y ago

May be greed, or may be because of regulatory capture. I.e. it is incredibly expensive to start a company due to all the requirements that the companies that do exist can continue to raise prices with no competition.

lamontcg 4y ago

> Look at their profits. This is a symptom of greed more than inflation. Inflation is just a rise in prices. Literally just defined as a rise in prices. It doesn't matter if the prices accurately reflect rising costs of doing business or wind up in profits. Inflation is more about the ability of consumers to continue to pay higher prices and the inelastic demand for whatever the good is. The market is fundamentally an auction and prices get bid up until elastic demand starts to appear.

TexanFeller 4y ago

Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example: 1) Near zero interest rates during the pandemic - technically set by the Fed, but under obvious political pressure to do it from both the former and current administrations. 2) Helicopter money from the government. I’m not just talking about the one time checks that people use as a strawman to attack as an inflation cause. There were student loan pauses, 300/mo per child credit(they tried to make it permanant!), and more. The fact that much of the money actually went to younger or poorer folks, which we celebrate, probably also drove inflation much more than money going to rich people, because the poor and the young are the most likely to immediately spend it. Lots of pandemic loans given to businesses too with little to no oversight too. 3) Supply side constraints due to shutdowns at suppliers overseas. 4) Demand side rebound demand for things people avoided or weren’t allowed during the pandemic. Much of this is likely attributable to government policy, so I blame our political class.

com2kid 4y ago
> Ask yourself why all of these companies were not greedy in previous years, In the case of Safeway/Albertsons, they jacked food prices up to make their finances look better for a merger. Flip side of this would be a subscription company dropping prices (or offering lots of promos) to gain lots of subs before a merger.
- chrisco255 4y ago
  No company operates in a vacuum. Particularly, companies in commodity based industries, like grocery chains, which average maybe 3-5% gross margins, cannot arbitrarily increase prices without consequences (drop in demand). People will shift their purchasing power elsewhere. Unless, of course, every where else is also increasing prices because of the sheer amount of excess monetary liquidity sloshing around in the economy.
  - com2kid 4y ago
    > People will shift their purchasing power elsewhere. You are neglecting that people may not have a choice. For people w/o cars, they are limited to whatever grocery stores are within walking distance, or accessible by mass transit. In my case, my easiest choices are the extremely overpriced organic store, Safeway, or QFC. Once Safeway and QFC merge, I'll be down to basically two local choices, and I live in a major metro. I know people who have one grocery store around them. There are parts of the country[1] where in a ~15+ mile radius you have a single choice for shopping. Now throw in people who don't have the time, or ability, to commute, and many grocery stores can charge whatever the heck they want up to the limit of what consumers can afford. https://mobile.twitter.com/moetkacik/status/1580938712740831232 https://mobile.twitter.com/moetkacik/status/1580938712740831... From that thread, yes indeed, the price increase is 76% for 2019 to 2022, but that is (obviously) a completely absurd level of price increases for a 3 year timespan. And this isn't some unique situation, this is pricing at one of America's largest grocery retailers, a grocery store chain that is the sole grocery store in many communities, and a grocery store chain that is set to soon become much larger. [1] This isn't unusual, in Washington State if you go outside any major city, you find that smaller cities/towns basically have one Safeway for the surrounding area and that is it. Visiting friends on the east coast, I noticed a similar situation, a cluster of small towns and a single grocery store (Kroger owned).